Feargal Quinn (Independent)

I welcome the Minister of State to the House and I welcome the words he used in his speech. I want to concentrate on three points he made. He said, "We must lower our cost base as rapidly as possible and become the highly competitive economy we once were, rebuilding a platform for future export-led growth." I entirely agree. One of the things that disappoints me about today's debate is that we have moved away from this to a large extent. It really is essential.

I started in business at the age of 23, way back in the 1960s, and I have seen many enterprises go out of business. On one occasion, we had a joint venture with another company and we had to close that company although we had taken on 100 people. It was one of the saddest days of my life when I had to tell those people that while we had encouraged them to join the company, we would have to close it down because it had not succeeded. They had every right to say, "It is not fair" and "That it is not our fault." However, the business did not succeed and so it closed.

When one takes, as we have this week, the first steps in reducing our costs and certainly the costs of running Government — they are only the first steps and we must go much further — people will say, "It is not fair. I did not cause this. It was those nasty people in the banks or somewhere else." Business is not about fairness, it is about competitiveness. If somebody takes business away, one loses that business. It is not a question of being fair.

We must find a way of reducing costs. On occasions in my business career, I had to go to our people and tell them that if we were to stay alive and be healthy again, it was time to take tough medicine and to cut costs. I found that when I managed to show leadership and explain the position, as I think we are attempting to do now — although we did not do it early enough back in October — it is possible to get acceptance and recognition.

It is not a question of fairness but there is a question of equality for everyone involved. From what I hear of the sounds being made this week with regard to the proposal to cut costs, particularly in regard to the pension commitment, there does not appear to be an understanding that this will be equally applied. There is a belief that those who are well off are not paying their fair share. We need to examine that issue.

We must take steps to address the costs of running the Government, which are too high. There is little doubt that the benefits of a fixed, secure job with a pension must be paid by somebody and it seems only fair that those who will benefit will be those who pay. This will be accepted if the cuts are seen to apply to everybody in the public service. The challenge for the Government is not just to cut wages and the cost of pay, although that is a very serious issue and we have no choice but to take that medicine in order to get healthy again. I support the Government in what it is doing and I believe it needs that support. However, it has not gone far enough and it will have to go further in the future.

When a business looks at its problems and realises it has a crisis and its costs are too high, it then looks not just at wage costs but at the cost of purchasing. We have not taken nearly enough steps in this regard. I saw some figures from a committee which considered the position of just one Department perhaps 15 years ago. It reckoned that with more sensible and better purchasing, £100 million was capable of being saved at that time, and savings would certainly be possible these days with e-tendering. To the best of my knowledge, that report has never been acted on despite the benefits that could be brought about.

For a business, the first thing is to reduce wages and one would go to the employees and tell them what had to be done in order to remain healthy. The second thing is to reduce the cost of purchasing goods. The third is to reduce the cost of rent. Therefore, I would support the idea of a property tax of some sort. I am not sure how this would be introduced and I know there was a huge reaction to rates in the past. However, the suggestion of a property tax on second homes seems quite acceptable and this is the sort of step that will have to be taken. This needs imaginative ideas on the part of the Government and it needs leadership. Acceptance of those measures will only happen if it is understood where they are coming from.

The next stage for a business, when it has sought to reduce wages, purchasing costs and rent, is to find whether it can bring in more money in higher sales or some other way. I do not believe we have done nearly enough in this area. We talked about tax during this debate but the idea that appealed to me is the concept that, as happened in the past, one would reduce the percentage rate of certain charges to take in more money. We know this applied very well with regard to corporation tax, which was reduced from 30% to 12.5% over a number of years. This was well thought out, well planned and well publicised. Every time we brought the tax rate down, we took in more money. I am not suggesting with full vigour that we should have taken up Senator John McCain's proposal. When he was in debate with the now President Obama, Senator McCain made the mistake of referring to an 11% tax rate in Ireland and how well we were doing because of that. At that stage, it would have been great publicity to say, "What a good idea, Senator McCain. We will bring our tax rate down to 11%." However, if it were done imaginatively, it would be possible to reduce tax rates and take in more money. We have seen this on a number of occasions, although it is not a simple issue.

Our thinking was wrong at budget time. At the very time when we were competing with Britain as it reduced its VAT rate by 3% or 3.5%, we raised our VAT rate, forgetting that we must encourage spending. I am unsure to what extent that is easy to achieve, but it is possible to be imaginative in those areas.

There is another area in which it is possible to be imaginative. I believe we should become the recognised country in Europe and the world for start-up companies, especially those which are knowledge-based. Someone involved in a start-up should say this is the country to go to before any other. I remember speaking with a man who was on the board of a company in the United States of America some years ago. It was during the bad times in Ireland. He could not believe that a person came before the board with a concept for opening a new business. That person intended to take on 38 people and the board agreed with his proposal. The man asked what would happen if it did not succeed. The board said that if it does not succeed, then it does not succeed. In other words, it was willing to be entrepreneurial and to take chances and accept that there might be failures. If we decide to seed fund start-up businesses which are imaginative, thinking and creative, we could become the global centre of excellence. If everyone planning to start up a business gave serious thought to locating in Ireland because of a fund, in some form or other, to encourage such businesses, then I believe there is a greater chance of making progress and of improving the present position. However, to do so, we would have to accept and recognise failures might occur. We must be willing to accept this if we are to create a seed capital fund.

Let us consider what occurred when Mr. Dermot Desmond approached the then Taoiseach, Mr. Charles Haughey, in the mid-1980s with an idea which was developed. Let us consider the sizable success in that case. It requires such imaginative thinking. Let us recall when Mr. Tony Ryan set up Ryanair. Anyone could have said that he should be careful, because no one at the time could have believed that within several years, and from those beginnings, one of Europe's largest airlines would be based in Ireland. We must recognise how the country has developed in the past 15 years.

I refer to an article in the Financial Times yesterday, the title of which is "In praise of Iceland". I was going to read it, but there is no time. However, it is worth reading.